Core & Main to Snap Up CES Industrial Piping Supply

Shares of Core & Main Inc. (CNM) rose marginally to close at $27.78 in extended trade on Wednesday after the company inked a deal to acquire all the assets of CES Industrial Piping Supply. The financial terms of the deal have been kept under wraps.

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Shares of the U.S.-based distributor of water, sewer and fire protection products have gained 17% since its IPO in July this year. (See Core & Main stock charts on TipRanks)

Founded in 1997, Kansas-based CES Industrial Piping Supply provides a full range of HDPE (high-density polyethylene) products and services, including pipe, fittings and fusion machines across several industries.

The addition of CES Industrial Piping complements Core & Main’s existing fusible HDPE business. Further, the company’s one-stop-shop offering of HDPE products is expected to enhance the growth potential for Core & Main.

The President at Core & Main Waterworks, Jack Schaller, said, “We’re excited to expand our HDPE presence in the Kansas City area by bringing CES Industrial Piping Supply into the Core & Main family. They are a team to count on and the proof is in the quality of their field work and loyalty of their customers.”

On September 15, RBC Capital analyst Michael Dahl reiterated a Hold rating on the stock and increased the price target to $30 from $28 (8% upside potential).

Dahl noted that Core & Main’s near-term earnings momentum looks strong based on robust demand and pricing support despite increasing supply shortages.

Nevertheless, the analyst recommends waiting for a better entry point to take a position in shares as he believes that Core & Main is fairly valued at the current multiples.

Overall, the stock has a Moderate Buy consensus rating based on 5 Buys and 6 Holds. The average Core & Main price target of $30.50 implies 9.8% upside potential from current levels.